That does feel like a steep hike just to get performance and fidelity at the same time. I'm also not convinced that most existing games will have a bunch of work done to allow them to fully utilize the hardware updates, even with the CPU architecture portion remaining constant. That's rather funny to me as the GPU portion changing would require more changes from devs than the CPU would, with x86 being x86 and newer models typically having perfect backward-compatibility, at least in the PC world anyways (this shows me that consoles are still over-limited in there forward-thinking and ability to somewhat easily adapt to hardware changes).
Anyways, PS5 is still basically priced at pre-inflation levels while PS5 Pro obviously has all of the post-inflation pricing built in. Lol, there's also an automatic upcharge when you can put an AI sticker on the product. Considering all this, I reckon that means $100 comes from the AI sticker and post-inflation status and the other $100 is the hardware upgrade.
Not saying I agree with it but that's Sony's thinking, if you ask me.